Dr. Reddy’s Laboratories (RDY) recently launched its generic version of Pfizer’s (PFE) pulmonary arterial hypertension (PAH) drug, Revatio (sildenafil) tablets. We note that Dr. Reddy’s is not the only company to launch a generic version of Revatio. Earlier this month, Mylan (MYL) had launched its generic version of the drug.
Apart from Mylan and Dr. Reddy’s, Watson Pharmaceuticals (WPI) also gained approval for its generic version of Revatio. Watson Pharma intends to launch its product shortly.
According to IMS Health, US sales of Revatio tablets in the 12 months ending September 30, 2012, were $338.7 million. While Revatio tablets lost exclusivity in September 2012, Revatio intravenous injection is slated to lose exclusivity in May 2013.
During the second quarter of fiscal 2013, Dr. Reddy’s launched 4 new generic products and filed 4 abbreviated new drug applications (ANDAs) with the US Food and Drug Administration (FDA).
Dr. Reddy’s generics division delivered a strong performance in North America (47%) in the second quarter of fiscal 2013. Generics revenues were driven by limited competition for the company’s generic versions of Pfizer’s Geodon (ziprasidone), Astellas Pharma’s Prograf (tacrolimus), GlaxoSmithKline’s (GSK) Arixtra (fondaparinux) and Bristol-Myers Squibb’s (BMY) and Sanofi’s (SNY) Plavix (clopidogrel). Revenues were also boosted by products from the Shreveport facility and the ramp-up in the antibiotics portfolio.
Our Recommendation
We currently have an Outperform recommendation on Dr. Reddy’s, which carries a Zacks #1 Rank (short term ‘Strong Buy’ rating). We are pleased with Dr. Reddy’s geographic reach and product depth along with the robust generic product pipeline. We expect the US generics business to continue performing well in the coming quarters. Other generic companies like Mylan and Watson Pharma currently carry a Zacks #2 Rank (short-term ‘Buy’ rating).
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